Mobile Consumer Survey 2013

Press release

Russia Highlights

New York, Moscow, 19 December, 2013 — Consumers, including baby boomers, across the globe are using more portable devices than ever before according to Deloitte Touche Tohmatsu Limited’s (DTTL) third edition of the “Global Mobile Consumer Survey” (GMCS). In fact, by the end of 2013, more than 2 billion smartphones, 300 million tablets, and one billion portable PCs are expected to be in use globally. The survey studied close to 40,000 consumers across twenty countries, including both developed and developing nations, to gain insights into how they are using mobile devices. The survey also sheds light on several opportunities on the horizon for the telecom industry, including the rise of data, the importance of speed, untapped baby boomers, and the power of instant messaging (IM).

“The Global Mobile Consumer Survey not only illustrates the scale and complexity of the global mobile industry from the consumer perspective, but reveals several opportunities for the sector,” said Phil Asmundson, Global Telecommunications Leader, DTTL. “In an industry where divergence continues to be the dominant theme, consumer perspectives become requisite to honing offerings that appeal to them directly.”

More Devices, More Data, More Speed

The GMCS found that consumers in developed markets and urban professionals in developing markets, on average, have up to nine portable devices, a growing proportion of which are being connected to mobile networks. Overall, the GMCS shows that ownership of Internet-connected devices increased in all countries surveyed between 2012 and 2013. Additionally, the study found that with a higher number of portable devices, the average data traffic per device is likely to increase. This proliferation of devices is a net positive for carriers as they have the opportunity to encourage consumers to migrate some of that traffic to mobile by offering larger data bundles.

There was also a significant desire among GMCS respondents to upgrade their data to LTE (4G). Close to 59 percent of respondents indicate a desire to upgrade to LTE in the next 12 months. That desire seemed more persistent in developing markets with 54 percent of Mexican respondents and 50 percent of Russian respondents likely to subscribe to LTE in the next year versus only 27 percent in the U.S. and 11 percent in Belgium.

The Untapped Baby Boomers

The study highlights baby boomers as an untapped segment that carriers should market to more seriously. With longer life expectancy, older consumers are likely to continue working and grow more interested in technology. Although, adoption has been historically faint, the survey found that older users are catching up to their younger counterparts. In fact, smartphones have penetrated 65 percent of the 55+ age category in Singapore and 73 percent in South Korea. However penetration continues to lag behind in the U.S. (31 percent), Belgium (21 percent), and Japan (15 percent). Seniors do not lag too far behind in tablet penetration as it remains low among all age groups across the board.

Many mobile carriers have overlooked the importance of older demographics instead of approaching them with the same degree of creativity and dynamism that they apply to the youth market. Education will be a key ingredient in unlocking their potential and motivating Baby Boomers to adopt smart phone and tablet technology.

Make Room for More Messaging

The industry encountered a tipping point in early 2013 when instant messaging (IM) platforms usage volumes overtook text messages for the first time. While SMS (Short Message Service) will continue to generate significant revenue, in excess of $130 billion1 in 2013, the rising popularity of IM services and other apps has likely contributed to mobile carriers’ success in selling mobile broadband. “In some markets consumers may be motivated to upgrade to smartphones and data tariffs2 so as to use IM services”, said Asmundson. For example, the Deloitte GMCS found that IM was ranked as the number one service in: Argentina (69 percent), China (72 percent), Germany (45 percent), Mexico (63 percent), Netherlands (73 percent), Singapore (60 percent), South Korea (59 percent), and Spain (77 percent).

The GMCS findings highlight the importance of mobile carriers reassessing their analysis of and relationship with IM services and other messaging apps. At the same time, mobile carriers must continue to focus time and resources on text messaging. Text will remain an important service for many particularly for late adopters.

Russian subscriber makes the difference

Russian trends mostly correspond to those observed abroad. Recent smartphone penetration growth (up to 47% in 2013) accounts for increasing number of total portables owned per capita (5 devices). However, Russian market still has unique features shaping the gap from other markets. A drop in single-function device (handheld gaming consoles and multimedia players) penetration is one of the proofs: these devices failed to gain momentum in a multi-function smartphone environment. On the other hand feature phone seems to be a hard nut to crack: penetration of feature phones in Russia is among the highest globally, moreover, 28% of respondents are planning to buy a device of this type within upcoming 12 months.

Summarizing the results of 2013 Mobile Consumer Survey, Anton Shulga, Partner of Deloitte & Touche CIS, CIS Telecom Leader, highlighted the most remarkable trends showed up in Russia over the year: “In 2013, Russia faced a rapid growth in the number of portables per capita. About 66% of those gadgets are connected to the Internet thus forcing operators to upgrade existing infrastructure and refine their strategies. Given permanent traffic growth and limited spectrum availability, the key to operators’ success lies in appropriate balance between 3G-network capacity expansion, LTE development, HetNet deployment and WiFi offload projects.“

As for LTE, we’ve been observing stable interest to this service over the last two years (around 50% of respondents want to buy an LTE-enabled device and subscribe to relevant tariff plan in 2013). However, potential subscribers are still poorly informed of the service and are not acquainted with killer apps which make an LTE-connection a must. To enable efficient utilization of growing LTE-capacities, operators should expand their service/product portfolio with offers benefitting from LTE-connection and inform their subscribers about advantages of the new standard.

“The Deloitte Global Mobile Consumer Survey captures the rapidly changing mobile environment for consumers around the globe,” added Asmundson. “The telecommunications sector must take note of these dynamic trends and opportunities in order to continue to see success.”

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Deloitte member firms’ technology, media & telecommunications practices are comprised of more than 1,400 clients in the U.S., including the vast majority of market category leaders across all sector segments. Deloitte practitioners, many with direct industry experience, deliver a breadth of services including professional audit, consulting, enterprise risk management, financial advisory and tax. The member firms’ practices are also home to the Deloitte Center for the Edge, which conducts original research and develops substantive points of view for new corporate growth. The Silicon Valley-based Center helps senior executives make sense of and profit from emerging opportunities on the edge of business and technology.

About the Deloitte Global Mobile Consumer Survey

Global Mobile Consumer Survey is based on a 20-country online survey of mobile phone users around the world. Fieldwork took place between May to July 2013, with 38,650 responses included in the final study.

The samples Belgium, Finland, France, Germany, Japan, Netherlands, Portugal, Singapore, South Korea, Spain, United Kingdom, United States are nationally representative. All samples in these countries were 2,000 except Finland (1,000), Portugal (600), UK (4,020). In Argentina, Brazil, China, India, Indonesia, Mexico, Russia, Turkey, the online research approach used results in a high concentration of urban professionals. These are likely to be relatively high earners within their country. All samples in these countries were 2,000 except Turkey (1,000).

The questions for this survey were written by Deloitte member firms. The multinational online research program was managed by Ipsos MORI. Questions were asked in a local official language in all countries and country specific examples were provided. Questions pertaining to spend were all asked in local currency. Currency ranges were tailored to local purchasing power where appropriate.

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Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.